Image for representational purposes only.
| Photo Credit: Getty Images
Even as the Tamil Nadu government is awaiting full details of the Unified Pension Scheme, it has begun the preliminary task of studying possible implications in the event of the adoption of such a scheme in the State.
At present, no decision is likely as Chief Minister M.K. Stalin is leaving for the United States on Tuesday (August 27, 2024) on a three-week-long tour. Besides, before taking any decision, consultation has to be held with stakeholders, indicates an official in the government. As and when the government decides to implement the State-specific pension scheme, the political leadership would prefer to wait for an “opportune or appropriate” moment to announce the launch.
As a matter of principle, the ruling DMK favours the restoration of the old pension scheme (or the defined benefit pension pension), if one is to go by its manifesto for the 2021 Assembly election. For the last three years, government employee associations have urged the government to fulfil the electoral promise. The authorities can derive input from the report of an expert committee set up in 2016 to examine the feasibility of the implementation of the old pension scheme.
When the Union government migrated to the New/National Pension Scheme (NPS) in January 2004, the Tamil Nadu government adopted its own scheme— Contributory Pension Scheme (CPS) on the lines of the NPS— from April 2004 but did not join the NPS. It may follow such an approach this time too. But, in the case of all-India service officers of the State cadre, the NPS is in force.
In respect of employees under the CPS, subscription at the rate of 10% of basic pay plus dearness allowance is being recovered from the employees with an equal matching contribution from the State government. Contributions of employees and the employer amounted to ₹73,974.64 crore up to April 30, 2024. This has been invested with the Life Insurance Corporation of India (LIC).
The old pension scheme covers 6,97,236 pensioners and family pensioners, apart from having 2,29,525 employees under its fold as of May 31, 2024. In respect of the CPS, 6,14,175 employees including those of local bodies were under the CPS till the end of May. Retirement age of the employees has been fixed at 60 years
As part of the old pension scheme, a minimum qualifying service of 10 completed years is necessary to become eligible for pension but to get a full pension, one has to put in 30 years of service. The pension is determined on the basis of 50% of pay last drawn at the time of retirement or 50% of average emoluments drawn during the last 10 months of service rendered, whichever is higher. During the current financial year, the State government is likely to spend ₹42,509.25 crore towards pension and other pensionary benefits.
